Jardine Math.sr Regulatory News (JAR)

To: Business Editor 28th February 2023 For immediate release

Jardine Cycle & Carriage Limited 2022 Financial Statements and Dividend Announcement The following announcement was issued today by the Company's 76.6%-owned subsidiary, Jardine Cycle & Carriage Limited.

For further information, please contact:Jardine Matheson LimitedJoey Ho (65) 9765 0717Brunswick Group LimitedBen Fry (65) 9017 9886

· Record underlying profit of US$1,096 million, 39% higher than 2021

· Improved performances from both Astra and non-Astra interests

· Proposed final dividend of US¢83 per share, total dividend of US¢111 for the year, 39% higher than 2021

"The Group achieved a record underlying profit in 2022. Astra achieved a record profit as it benefited from Indonesia's strong economic recovery and higher commodity prices, while the Group's non-Astra interests collectively also made a record contribution, mainly due to the strong performance of THACO and Direct Motor Interests. The Group expects to face challenges ahead arising from uncertainties around the global economic outlook, but we remain confident in the Group's prospects and it is well-positioned to achieve sustainable growth through the opportunities in Southeast Asia." Ben Keswick, Chairman

The exchange rate of US$1=S$1.34 (31st December 2021: US$1=S$1.35) was used for translating assets and liabilities at the balance sheet date, and US$1=S$1.38 (2021: US$1=S$1.34) was used for translating the results for the period. The financial results for the year ended 31st December 2022 have been prepared in accordance with International Financial Reporting Standards and have not been audited or reviewed by the auditors.

* The Group uses 'underlying profit attributable to shareholders' in its internal financial reporting to distinguish between ongoing business performance and non-trading items, as more fully described in Note 6 to the condensed financial statements. Management considers this to be a key performance measurement that enhances the understanding of the Group's underlying business performances.

^ Included in 'non-trading items' are unrealised gains/losses arising from the revaluation of the Group's equity investments.

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CHAIRMAN'S STATEMENTOverview Jardine Cycle & Carriage ("JC&C" or "the Group") achieved a record underlying profit in 2022, reflecting improvements in the performance of most parts of the portfolio.Astra contributed US$913 million to the Group's underlying profit, 39% higher than the previous year, driven primarily by the recovery in the Indonesian economy and higher commodity prices.Truong Hai Group Corporation ("THACO") contributed US$83 million, 34% higher than the previous year, mainly due to a strong performance from its automotive business.Direct Motor Interests contributed US$63 million, an increase of 62%, with higher profits in Singapore, Malaysia and Indonesia.The contribution from the Group's Other Strategic Interests was 4% lower at US$86 million, due to a weaker performance by Siam City Cement ("SCCC"), although Refrigeration Engineering Electrical ("REE") continued to perform well, particularly from its renewable energy business. Corporate costs fell from US$59 million to US$48 million, primarily due to the translation of foreign currency loans, which led to a foreign exchange gain of US$4 million in 2022, compared to a loss of US$28 million in the previous year. This foreign exchange impact more than offset a US$17 million increase in net financing charges. The Group's underlying profit attributable to shareholders increased by 39% to US$1,096 million. After accounting for non-trading items, the Group's profit attributable to shareholders was US$740 million, 12% higher than the previous year. The non-trading items recorded in the year mainly comprised unrealised fair value losses of US$238 million related to non-current investments, and an impairment loss of US$114 million in respect of the Group's investment in SCCC, necessary due to a challenging operating environment.The Group's financial position remains strong. The consolidated net cash position, excluding the net borrowings within Astra's financial services subsidiaries, was US$893 million at the end of 2022, compared to US$770 million at the end of 2021, mainly due to strong operating cash flows. Net debt within Astra's financial services subsidiaries increased from US$2.7 billion at the end of 2021 to US$2.8 billion. JC&C corporate net debt was US$1.5 billion, similar to the previous year end. Strategic Developments

Astra

Over the past year, Astra has continued to make a number of strategic investments in new businesses. Continuing its focus on providing a compelling financial services offer to its customers, it acquired a 49.6% interest in Bank Jasa Jakarta for US$260 million, with plans to transform it into a digital bank in Indonesia.

Astra also continued its diversification away from coal. United Tractors has signed a conditional sale and purchase agreement to acquire 90% interests in Stargate Pacific Resources and Stargate Mineral Asia, a nickel mining and processing business, for a total of US$272 million. It has also acquired a 31.5% interest in Arkora Hydro, a company focused on hydro-based energy power generation.

Astra also acquired a 7.4% interest in Medikaloka Hermina, one of Indonesia's largest hospital groups, as part of its growing focus on medical services.

Direct Motor Interests

During the year, JC&C further increased its interest in Cycle & Carriage Bintang from 89.0% to 96.9% through on-market purchases, acceptances under its Voluntary General Offer and direct purchases from the minority shareholders. Cycle & Carriage Bintang was successfully delisted from Bursa Malaysia in September.

In February 2023, Cycle & Carriage Singapore completed a sale and leaseback arrangement of its properties for around US$230 million.

Other Strategic Interests

JC&C increased its interest in REE during the year, from 31.0% to 33.6%, through a series of on-market purchases, for around US$34 million.

Dividends

The Board is recommending a final one-tier tax-exempt dividend of US¢83 per share (2021: US¢62 per share) which, together with the interim dividend of US¢28 per share (2021: US¢18 per share), will produce a total dividend for the year of US¢111 per share (2021: US¢80 per share), 39% higher than 2021.

sustainability

ESG is firmly embedded in JC&C's management system. It is an important part of its long-term portfolio strategy and is one of the considerations when deploying capital. In 2022, JC&C published its commitments around coal, carbon, energy and biodiversity as part of the Group's role in supporting a just energy transition. In addition, JC&C has published its first Climate Change Report in line with the Task Force on Climate-Related Financial Disclosures ("TCFD") recommendations.

People

On behalf of the Board, I would like to thank our 240,000 employees across the region for their commitment and effort, which have enabled the Group to achieve a strong performance in 2022.

I am delighted to welcome Amy Hsu, who was appointed as Group Finance Director and joined the Board in August. Amy previously carried out various senior finance roles in the Jardine Matheson Group. Stephen Gore, our previous Group Finance Director, has taken on a new role focused on driving business development across Southeast Asia for the Jardine Group. He remains a Director of JC&C.

Outlook 

The Group expects to face challenges ahead arising from uncertainties around the global economic outlook, but we remain confident in the Group's prospects and it is well-positioned to achieve sustainable growth through the opportunities in Southeast Asia.

Ben Keswick

Chairman

GROUP MANAGING DIRECTOR'S REVIEW

Group Review

The contributions to JC&C's underlying profit attributable to shareholders by business segment were as follows:  

Astra

Astra contributed US$913 million to JC&C's underlying profit, 39% higher than the previous year, led by stronger performances from most of its businesses, particularly its automotive, financial services, heavy equipment and mining operations. Total unrealised fair value losses of US$52 million in respect of its GoTo and Hermina investments were reported under JC&C's non-trading items.

Automotive

Net income increased by 33% to US$648 million, reflecting higher sales volumes.

· The wholesale car market increased by 18% to 1.0 million units in 2022. Astra's car sales were 17% higher at 574,000 units, with its market share relatively stable at 55%. 

· The wholesale market for motorcycles increased by 3% to 5.2 million units in 2022. Astra's Honda motorcycle sales were 2% higher at 4.0 million units, which led to a slight decrease in market share from 78% to 77%. 

· Components business, Astra Otoparts, reported an increase in net income from US$43 million to US$87 million, mainly due to higher revenues from the original equipment manufacturer and replacement market segments.

Financial Services

Net income for the Financial Services division increased by 22% to US$404 million, due to higher contributions from the consumer finance businesses on the back of the strong automotive performance.

· Consumer finance businesses saw a 21% increase in the amounts financed to US$6.8 billion. The net income contribution from the group's car-focused finance companies increased by 35% to US$121 million, and the contribution from the motorcycle-focused financing business increased by 29% to US$214 million, due to larger loan portfolios and lower loss rates.

· General insurance company, Asuransi Astra Buana, reported a 12% increase in net income to US$80 million, primarily as a result of higher underwriting income and investment income.

Heavy Equipment, Mining, Construction and Energy

Net income from Heavy Equipment, Mining, Construction and Energy increased significantly from US$427 million to US$850 million, mainly due to improved profits from heavy equipment sales, mining contracting and coal mining, all of which benefited from higher coal prices.

· Komatsu heavy equipment sales were 86% higher at 5,750 units, while revenue from the parts and service businesses was also higher.

· Mining contracting operations saw a 12% increase in overburden removal volume at 954 million bank cubic metres, while coal production was stable at 116 million tonnes.

· Coal mining subsidiaries reported a 10% increase in coal sales at 9.9 million tonnes, including 2.4 million tonnes of metallurgical coal.

· Agincourt Resources reported a 13% decrease in gold sales at 286,000 oz.

· General contractor, Acset Indonusa, reported a lower net loss of US$30 million compared to US$49 million last year. The company continued to be impacted by the slowdown of ongoing projects and reduced construction project opportunities.

Agribusiness

Net income from Agribusiness decreased by 12% to US$92 million, mainly due to lower crude palm oil sales and production, which offset an increase in selling prices.

Infrastructure and Logistics

Astra's infrastructure and logistics division reported an increase in net profit from US$5 million to US$35 million, due to improved performance in its toll road businesses, which saw a 29% increase in toll road revenues.  Astra has 396km of operational toll roads along the Trans-Java network and in the Jakarta Outer Ring Road.

THACO

THACO contributed a profit of US$83 million, 34% higher than the previous year. The profit from its automotive business continued to grow, supported by strong production levels and a temporary reduction in registration fees for locally-assembled vehicles. Its unit sales were 30% higher, with market share increased from 22% to 23%. Margins benefited from strong demand and an improved sales mix. The group continues to expand its investment in agriculture and, as a result, saw an increase in losses from this business as substantial pre-production costs were incurred.

Direct Motor Interests

The Group's Direct Motor Interests contributed a US$63 million profit, 62% up compared to the previous year.

· Cycle & Carriage Singapore's contribution was 13% higher at US$33 million, due to increased profits from its premium and used car operations. New passenger car sales volume, however, fell by 15% to 5,761 units, particularly in respect of its mass market models, which was adversely impacted by the tightened COE cycle. Nevertheless, overall market share in Singapore has increased from 15% to 19%.

· In Indonesia, Tunas Ridean contributed US$28 million, 71% higher than the previous year, with higher profits across its automotive, financial services and leasing businesses.

· Cycle & Carriage Bintang in Malaysia contributed a profit of US$7 million, compared to US$1 million in the previous year, mainly due to improved sales volumes and margins backed by a larger order book, arising from a temporary reduction in government sales tax.

Other Strategic Interests

The Group's Other Strategic Interests contributed a US$86 million profit, 4% down compared to the previous year.

· REE's contribution of US$38 million was 70% higher than the previous year, mainly due to an improved performance from its renewable energy investments as a result of favourable hydrology and an increase in renewable wind capacity.

· The Group's investment in Vinamilk produced a slightly lower dividend income of US$37 million, compared to US$39 million in the previous year. Vinamilk reported a 20% decrease in net profit, mainly due to higher raw material costs.

· SCCC's contribution fell by 59% to US$12 million, as the business was adversely impacted by higher energy costs and inflationary pressure, as well as increased tax rates in Sri Lanka and the depreciation of the rupee, which offset improved cement volumes and prices in most of its markets.

Corporate Costs

Corporate costs were US$48 million, compared to US$59 million in the previous year, improving the overall underlying profit of the Group. This was primarily due to a foreign exchange gain of US$4 million recorded on the translation of foreign currency loans in 2022, compared to a loss of US$28 million in the previous year. This foreign exchange impact more than offset an increase in net financing charges of US$17 million.

Summary

The Group achieved a strong set of results in 2022. The Group expects continuing uncertainties around the global economic outlook, but we remain confident in JC&C's prospects and our abilities to achieve sustainable growth.

Ben Birks

Group Managing Director

CORPORATE PROFILE

Jardine Cycle & Carriage ("JC&C" or "the Group") is the investment holding company of the Jardine Matheson Group ("Jardines") in Southeast Asia. Listed on the Mainboard of the Singapore Exchange and a constituent of the Straits Times Index, the Group is 76%-owned by Jardines.

By investing in the region's market leaders, we aim to deliver sustainable growth to create evermore opportunities for the people and communities of Southeast Asia. Together with our subsidiaries and associates, JC&C provides over 240,000 jobs across the region.

A diversified portfolio

For more information on JC&C and our businesses, visit www.jcclgroup.com.

(1) Higher revenue was mainly due to higher sales in Astra's automotive, financial services, heavy equipment and mining operations and higher sales in Direct Motor Interests.

(2) Increase in finance charges mainly due to higher interest rate, partially offset by lower level of net debt

(1) Fair value through other comprehensive income ("FVOCI")